Natural Disaster, Man-made Fraud

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The Federal Emergency Management Agency (FEMA) makes it pretty clear that only primary residences damaged during a disaster are eligible to receive any financial aid under the agency’s disaster assistance program. Despite the massive destruction caused by Hurricane Sandy, damage to vacation homes did not qualify for FEMA aid. (Being deprived of one’s summer getaway place is not actually an emergency.) As reported by NJ.com, one fraudster’s way around the rules: claim the secondary home as the primary residence to collect more than $20,000 in disaster assistance.

The story states that the New Jersey resident’s summer home was heavily damaged by the storm that roared through Ocean City, Maryland in November 2012. Her vacation home, which she declared was her primary home, was deemed uninhabitable. She also claimed that her Volvo station wagon was inoperable. (In reality, her real primary residence and car, both located in New Jersey, were just fine.) Over three months, she collected a total of $20,873 for housing and transportation assistance from FEMA.

The woman eventually admitted to falsifying her financial aid claim when she pleaded guilty to disaster benefits fraud. The 53-year-old was sentenced to one day in prison, six months of house arrest (in the one that’s perfectly habitable) with electronic monitoring and three years of supervised release. She also was ordered to pay $13,373 in restitution.

According to FEMA’s Sandy Recovery Office, more than $1.4 billion was doled out to disaster survivors after the storm. (Intended for those with real emergencies.) This woman took advantage of a taxpayer-funded program designed for those who legitimately lost their primary residences in this devastating natural event. When the going got tough, she got greedy, which nearly always ends in disaster.

Source: Today’s ”Fraud of the Day” is based on an article, ”N.J. woman sentenced for committing Hurricane Sandy fraud,” published by NJ.com on July 20, 2016.

CAMDEN — A Voorhees woman who admitted lying to federal officials to get Hurricane Sandy financial aid Tuesday was sentenced to house arrest and ordered to make restitution, according to the office of U.S. Attorney Paul J. Fishman.

Andrea Knoerzer pleaded guilty to a charge of disaster benefits fraud before U.S. District Judge Jerome B. Simandle in March. Simandle sentenced her Tuesday to one day in prison, six months of house arrest with electronic monitoring and three years of supervised release, Fishman’s office said. In addition, Simandle ordered Knoerzer to pay restitution of $13,373, it said.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.